Paxful is a peer-to-peer finance platform for people to make payments, transactions, and send money by buying and selling Bitcoin as a means of exchange. The company’s Global Community and Education Lead, Paxful, Renata Rodrigues, said Nigeria must act fast to seize opportunities presented by bitcoin to empower the vulnerable population and deepen financial inclusion. She also said education and quality regulation were critical for the operation of crypto assets. In this exclusive chat with James Emejo, she said the digital payment platform could compensate for payment difficulties in conventional banking systems, enhance diaspora remittances as well as shield people from the impacts of currency devaluation. Among other things, she argued that a growing number of people are using bitcoin as a means of wealth and employment creation, adding that bitcoin could help address social inequality in the country. Excerpts:
With rising poverty and inflation currently confronting countries around the world, especially developing economies, what benefits does bitcoin bring to the table?
So, bitcoin helps in different ways – and that’s partly why I travel a lot to have an insight on how people take advantage of it. In our case, in the peer-to-peer platform people do it in different ways. Sometimes, people go to another country and they don’t have access to banks or they have very expensive means to send money back home and sometimes they have limitations back home. So you have people helping people here. For instance, because we have about 450 methods of payments…Paxful is like Alibaba but instead of you selling a bike, you sell bitcoin. For example, If I want to pay my teachers for my Portuguese classes in Brazil, what I do is that I use bitcoin as a means to settle them and so bitcoin becomes like an Uber of finance; someone in Brazil lends his access to finance to me and I sell bitcoins to them and instead of paying me they pay the teacher for me. The difference here is basically that when I do this; I am making money as well because I can charge the person my margin.
The other use case is people making money and creating business around the platform. For example, we have gift cards we discounted on the platform pretty nice so you can sell your bitcoin. Like in exchange of gift cards that have the face value of $100, you are going to pay $60 for that gift card.
You also have arbitrage, that is when you buy bitcoin at a small cost and send it to markets that need bitcoin, you sell more expensive and we have a lot of people who do that globally and it is a big opportunity for them.
Can you expatiate on Paxful’s strong affinity for financial literacy given the relatively low awareness and suspicions in Nigeria?
As a marketer, I discovered that you can’t tell two people “come here and download my App and you’re going to have $10”; they will simply cash-out and never go back to the technology right? So we decided that it’s going to be a long term project and we are going to teach people about the technology so they can have better judgment on how to use it if they want to use it and particularly avoid scammers or avoid the bad actors around the ecosystem. So we understood that was very important.
On the other hand, by talking to our users, we saw that they are not like millionaires, but more of taxi drivers and the rest and so they are interested. It’s all about making money and you just need to understand how this works. So we decided to teach these people what it is and how it works. And that’s what we’ve been doing at Paxful in the past seven years and the Paxful education center is about a year since we launched in Nigeria.
So how receptive are Nigerians to bitcoin adoption so far?
Yes, it’s been encouraging, what I found is that Nigerians are very enterprising. They want to understand what is there and how this can help them – and Nigerians are very objective – don’t tell me beautiful things, I want to know how this works. We also help people to understand finance. I come from a culture where they say women don’t think about money – we always say we don’t have enough money to save. And what I am seeing is that people understand that bitcoin helps them to save. In another sense, if I take a 1000 bill and put it under my pillow, it’s not going to make anything for me, in fact it will lose its value in the face of inflation. So people are strongly looking for alternatives to make small amounts of money go somewhere…I see more people using bitcoin as a means to getting to more profitable ways.
Do you think bitcoin can actually promote financial inclusion in Nigeria?
I think first, there are people who the banks are not interested in because these people make them spend money instead of making money. Like for the banks, it doesn’t make sense if you come with $5, I have to pay for your verification, I have to pay for your keeping – it doesn’t make sense for me – and so these people are automatically excluded from the system but they have the right to be included. And the beauty of bitcoin is that the person that buys bitcoin $3 for $5 dollar of bitcoin will have the same profit as Elon Musk that buys. In essence, bitcoin doesn’t differentiate where you come from. Bitcoin can reduce inequality in society. I mean you can bring people to the game. For example, in India, we have this guy that started with $3 and now he’s one of our biggest traders.
With unemployment currently at 33.3 per cent, the bulk of who are youths; how can crypto currency help Nigeria solve this huge challenge?
I think bitcoin presents several opportunities; one, you really have an intellectual mass that can enhance employment. These guys can build their own businesses and connect with global companies and also be freelancers for global companies if they can understand the technology and that’s one of the things we want to do here in Paxful Nigeria as well. It’s also about helping the fintechs to understand the market and to be on-boarded to the Nigerian market.
Right now because bitcoin is a kind of taboo in Nigeria we are blocking these opportunities to create employment for millions of Nigerians and to the economy in general.
So bitcoin can be beneficial not just to the poor population but also the wealthy in the society because they understand the technology and applicability in the country and they can help companies abroad to come and apply this in the country. I am seeing this happen in Salvador Brazil where I come from because bitcoin is a legal tender and now they create a mass of intellects. We are also building these in our centers so you have people from our bitcoin community teaching about marketing for bitcoin, legislation for bitcoin, accountability – so here at Paxful, we are building people for the new technology because it is inevitable and it is already happening and you either embrace and build a strong community that will receive this and generate employments. Yes, people will find their ways under the current embargo but you’re not going to optimize the opportunities as much as you could. In Paxful we are trying to help people to think about this as well, contribute to information and education about the technology as well.
After much hesitation by regulatory agencies, the Securities and Exchange Commission (SEC) recently announced plans to develop a detailed framework for the operation and regulation of crypto assets in the country. What is your opinion on this development?
We are not against regulation at all. We understand that regulations help people to protect themselves against bad actors. In fact, we support countries with the knowledge that we’ve been seeing in different parts of the world – like this worked in this and this didn’t work –for example, one of the things we saw in El-Salvador was education. People were implementing the law and there wasn’t education there and that’s why we came with education there. And we are connecting all the centers around this.
So for Nigeria, I see the same. If you implement a good law – and I know the government is making efforts to dialogue with the players in the sector and I loved this move because this is a good way to go; you must talk with the people that know the technology. I think if you’re protecting your population and you also onboard the technology, this can be more beneficial for everyone – because as a serious company, we don’t want bad actors in Nigeria, it doesn’t help our market. I totally think that if the government opens its mind to cryptocurrency, it will be amazing for this country.
The Paxful education centre in Abuja has been up and running in the past one year, what exactly is your main objective for Nigeria?
Nigeria is the lead and we see this in per-to-peer platforms where you also see the trend in the world. One of the things is that the bitcoin innovation is coming from developing countries and not from the developed world. And this is because of the need – when we have a need for something, we get creative and build things on top of this. So Nigeria is already leading in the way you should use bitcoin. What we are doing at Paxful is just to optimise this. We want Nigeria to be the leader of the continent as well as a leader in intellectual production around the technology of bitcoin as well. So we want the center to be a place where we can interact with other countries as well and we can invite people from different countries to think together. So we want to build knowledge and we want Nigeria to lead this effort in the continent.
